New study finds UK legal system better for price and choice of conveyancing services
A European Commission study has found that deregulated legal systems, such as that in England and Wales, are better for consumers in terms of price and choice of conveyancing services (legal services associated with house and land sales).
Conveyancing services comprise, for example, pre-contract searches, transfer deed drafting, signature certification and deed registration in the Land Registry.
The study, the first of its kind, surveyed the cost and performance of conveyancing services in 21 EU countries. It concluded that a deregulated system performs better than the notary system, which is used on most parts of the continent.
The deregulated system in England and Wales is cheaper than the Latin notary system used across most of continental Europe and also secured strong assessments in terms of quality of service. Property turnover across the 27 countries that now make up the EU was 1,800 billion Euros for 2005, with the corresponding turnover in conveyancing services being around €16.7 billion. England and Wales with 11 per cent of the population and 15 per cent of Gross Domestic Product contributed 30 per cent to property turnover. The survey found that England and Wales falls into the lower range of transaction costs at 1-7 per cent of value – along with Scotland and Ireland and also the Czech Republic, Denmark, Portugal, Slovenia and Sweden.
The Commission will now consider whether to take action to liberalise access to conveyancing services, a position supported by the United Kingdom Government.
Professor Peter Sparkes from the University of Southampton was the national rapporteur for England and Wales and helped to compile evidence for the report. He says:
“Buying a house may seem like a nightmare at home, but this survey suggests that the cost of transactions abroad is likely to be higher. It is very unusual to have chains of transactions on the continent and so there tends to be one lawyer dealing with the document who advises both seller and buyer. Our system of chains helps to safeguard against the risks of a downturn of the kind that may be underway at present. Although it is very difficult to compare transaction costs, because of varying rates of stamp duty, it is no surprise to find our system among the cheapest in Europe.”
The University of Southampton is leading the way in this emerging market, with the launch of the first postgraduate course in English devoted specifically to land law in its European and comparative aspects. The LLM in European and Comparative Property Law course offers a unique blend of challenging and up to the minute units, all of which should be of interest to anyone involved professionally in the European property market.
For more information about the course visit: www.soton.ac.uk/law/pgopportunities/llm/EU_comparative_property.html
Notes for editors
- The traditional, highly regulated Latin notary system which exists in most continental EU countries. This model is characterised by mandatory involvement of notaries, quantitative restrictions on entry (numerus clausus), fixed fees and strict market conduct regulation.
- The deregulated Dutch notary system under which no numerus clausus exists. Fees are negotiable and market structure and conduct regulation is less strict.
- The lawyer system existing in the UK, Ireland, the Czech Republic, Slovakia and – to a lesser extent – Austria. This features quality control of professionals through licensing and professional exams, negotiable fees and lower levels of market structure and conduct regulation.
- The Scandinavian licensed real estate agent system under which real estate agents provide legal services too. This system exists in Sweden, Finland and Denmark, each with its own characteristics. This model has little regulation on market entry, conduct and structure and has negotiable fees.